Restructuring and Related Charges

6 Months Ended

Feb. 28, 2017

Restructuring and Related Charges [Abstract]

12. Restructuring and Related Charges

a. 2017 Restructuring Plan

In conjunction with the restructuring plan that was approved by the Company’s Board of Directors on September 15, 2016 (the “2017 Restructuring Plan”), the Company charged $43.4 million and $77.5 million of restructuring and related charges to the Condensed Consolidated Statement of Operations during the three months and six months ended February 28, 2017, respectively. The 2017 Restructuring Plan is intended to better align the Company’s global capacity and administrative support infrastructure in order to further optimize organizational effectiveness. This action includes headcount reductions across the Company’s Selling, General and Administrative cost base and capacity realignment in higher cost locations. The restructuring and related charges during the three months and six months ended February 28, 2017 include cash costs of $8.1 million and $26.0 million related to employee severance and benefit costs, respectively, $1.1 million and $4.5 million related to lease costs, respectively, $0.1 million and $0.3 million of other related costs, respectively, as well as non-cash costs of $34.1 million and $46.7 million related to asset write-off costs, respectively.

The Company currently expects to recognize approximately $195.0 million in pre-tax restructuring and other related costs over the course of the Company’s fiscal years 2017 and 2018. The restructuring and related charges are expected to include $55.0 million to $75.0 million of employee severance and benefit costs; $110.0 million to $130.0 million of asset write-off costs; and $10.0 million of contract termination costs and other related costs. Since the inception of the 2017 Restructuring Plan, a total of $77.5 million of restructuring and related costs have been recognized. Of the $77.5 million recognized to date, $8.1 million was allocated to the EMS segment, $48.0 million was allocated to the DMS segment and $21.4 million was not allocated to a segment. The remaining $117.5 million of the restructuring and related costs expected to be recognized reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain plants are still subject to the finalization of timetables for the transition of functions and consultation with the Company’s employees and their representatives.

The tables below set forth the significant components and activity in the 2017 Restructuring Plan during the three months and six months ended February 28, 2017 (in thousands):

2017 Restructuring Plan – Three Months Ended February 28, 2017

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	November 30, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
Employee severance and benefit costs	$	9,894	$	8,090	$	15	$	(7,662)	$	10,337
Lease costs		2,524		1,158		―		(110)		3,572
Asset write-off costs		―		34,065		(34,065)		―		―
Other related costs		89		104		―		(143)		50
Total	$	12,507	$	43,417	$	(34,050)	$	(7,915)	$	13,959

2017 Restructuring Plan – Six Months Ended February 28, 2017

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31,2016		Charges		Non-Cash Activity		Payments		February 28, 2017
Employee severance and benefit costs	$	―	$	25,986	$	―	$	(15,649)	$	10,337
Lease costs		―		4,449		―		(877)		3,572
Asset write-off costs		―		46,705		(46,705)		―		―
Other related costs		―		339		―		(289)		50
Total	$	―	$	77,479	$	(46,705)	$	(16,815)	$	13,959

The tables below set forth the significant components and activity in the 2017 Restructuring Plan by reportable segment during the three months and six months ended February 28, 2017 (in thousands):

2017 Restructuring Plan – Three Months Ended February 28, 2017

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		November 30, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
	EMS	$	125	$	2,536	$	(1,653)	$	(537)	$	471
	DMS		2,783		36,502		(32,172)		(3,474)		3,639
	Other		9,599		4,379		(225)		(3,904)		9,849
	Total	$	12,507	$	43,417	$	(34,050)	$	(7,915)	$	13,959

2017 Restructuring Plan – Six Months Ended February 28, 2017

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
	EMS	$	―	$	8,057	$	(6,723)	$	(863)	$	471
	DMS		―		48,006		(39,749)		(4,618)		3,639
	Other		―		21,416		(233)		(11,334)		9,849
	Total	$	―	$	77,479	$	(46,705)	$	(16,815)	$	13,959

b. 2013 Restructuring Plan

In conjunction with the restructuring plan that was approved by the Company’s Board of Directors in fiscal year 2013 (the “2013 Restructuring Plan”), the Company charged $1.5 million and $3.3 million of restructuring and related charges to the Condensed Consolidated Statement of Operations during the three months and six months ended February 28, 2017, respectively, compared to $2.5 million and $3.9 million during the three months and six months ended February 29, 2016, respectively. The 2013 Restructuring Plan is intended to better align the Company’s manufacturing capacity in certain geographies and to reduce the Company’s worldwide workforce in order to reduce operating expenses. The restructuring and related charges during the three months and six months ended February 28, 2017 include cash costs of $1.0 million and $2.4 million related to employee severance and benefit costs, respectively, and $0.4 million and $0.8 million of other related costs, respectively, as well as non-cash costs of $0.1 million and $0.1 million related to asset write-off costs, respectively. The restructuring and related charges during the three months and six months ended February 29, 2016 include cash costs of $2.5 million and $3.6 million related to employee severance and benefit costs, respectively, and $0.0 million and $0.3 million of other related costs, respectively.

The Company currently expects to recognize approximately $179.0 million in pre-tax restructuring and other related costs over the course of the Company’s fiscal years 2013 through 2017 under the 2013 Restructuring Plan. Since the inception of the 2013 Restructuring Plan, a total of $165.2 million of restructuring and related costs have been recognized. Of the $165.2 million recognized to date, $127.4 million was allocated to the EMS segment, $28.9 million was allocated to the DMS segment and $8.9 million was not allocated to a segment. A majority of the total restructuring costs are related to employee severance and benefit arrangements. The charges related to the 2013 Restructuring Plan, excluding asset write-off costs, are currently expected to result in cash expenditures of approximately $157.4 million that have been or will be payable over the course of the Company’s fiscal years 2013 through 2017. The remaining $13.8 million of the restructuring and related costs expected to be recognized reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain plants are still subject to the finalization of timetables for the transition of functions and consultation with the Company’s employees and their representatives.

The tables below set forth the significant components and activity in the 2013 Restructuring Plan during the three months and six months ended February 28, 2017 and February 29, 2016 (in thousands):

2013 Restructuring Plan – Three Months Ended February 28, 2017

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	November 30, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
Employee severance and benefit costs	$	15,204	$	1,007	$	(53)	$	(4,402)	$	11,756
Lease costs		21		―		―		―		21
Asset write-off costs		―		70		(70)		―		―
Other related costs		720		433		(3)		(321)		829
Total	$	15,945	$	1,510	$	(126)	$	(4,723)	$	12,606

2013 Restructuring Plan – Six Months Ended February 28, 2017

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
Employee severance and benefit costs	$	17,266	$	2,497	$	(722)	$	(7,285)	$	11,756
Lease costs		21		―		―		―		21
Asset write-off costs		―		70		(70)		―		―
Other related costs		740		783		(35)		(659)		829
Total	$	18,027	$	3,350	$	(827)	$	(7,944)	$	12,606


2013 Restructuring Plan – Three Months Ended February 29, 2016

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	November 30, 2015		Charges		Non-Cash Activity		Payments		February 29, 2016
Employee severance and benefit costs	$	20,775	$	2,467	$	586	$	(5,713)	$	18,115
Lease costs		64		―		―		―		64
Other related costs		856		68		27		(80)		871
Total	$	21,695	$	2,535	$	613	$	(5,793)	$	19,050


2013 Restructuring Plan – Six Months Ended February 29, 2016

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2015		Charges		Non-Cash Activity		Payments		February 29, 2016
Employee severance and benefit costs	$	30,047	$	3,545	$	(810)	$	(14,667)	$	18,115
Lease costs		64		―		―		―		64
Other related costs		846		343		(22)		(296)		871
Total	$	30,957	$	3,888	$	(832)	$	(14,963)	$	19,050

The tables below set forth the significant components and activity in the 2013 Restructuring Plan by reportable segment during the three months and six months ended February 28, 2017 and February 29, 2016 (in thousands):

2013 Restructuring Plan – Three Months Ended February 28, 2017

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		November 30, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
	EMS	$	15,388	$	1,440	$	(55)	$	(4,604)	$	12,169
	DMS		557		70		(71)		(119)		437
	Total	$	15,945	$	1,510	$	(126)	$	(4,723)	$	12,606

2013 Restructuring Plan – Six Months Ended February 28, 2017

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2016		Charges		Non-Cash Activity		Payments		February 28, 2017
	EMS	$	17,338		3,280		(744)		(7,705)	$	12,169
	DMS		689		70		(83)		(239)		437
	Total	$	18,027	$	3,350	$	(827)	$	(7,944)	$	12,606


2013 Restructuring Plan – Three Months Ended February 29, 2016

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		November 30, 2015		Charges		Non-Cash Activity		Payments		February 29, 2016
	EMS	$	20,079	$	1,757	$	603	$	(5,324)	$	17,115
	DMS		1,616		778		10		(469)		1,935
	Total	$	21,695	$	2,535	$	613	$	(5,793)	$	19,050


2013 Restructuring Plan – Six Months Ended February 29, 2016

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2015		Charges		Non-Cash Activity		Payments		February 29, 2016
	EMS	$	28,834	$	2,993	$	(823)	$	(13,889)	$	17,115
	DMS		1,960		1,014		(9)		(1,030)		1,935
	Other		163		(119)		―		(44)		―
	Total	$	30,957	$	3,888	$	(832)	$	(14,963)	$	19,050